Nation X produces and consumes only one good. This good is produced only with labor and all workers are exactly alike. One worker produces one unit of this good every day. One worker in Nation Y can produce two units of the goods a day (and this is the only good they consume) . What will happen if there is open trade between the countries?
A) Nation X will import from Nation Y.
B) Nation X will outsource the production of the good to Nation Y.
C) Nation Y will import the good from Nation X.
D) No trade or outsourcing will take place.
Correct Answer:
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